Let me just get some facts in I observed about IB (I'm at MBB myself, still in process to switch to a PE fund):
- IB is toughest the first few years
- IB drastically improves in lifestyle at VP level (talking more like 09.00am to 09.00pm type of hours), contrary, e.g., MBB gets worse above associate level (worse hours than VP)
- Cash comp for IBD VPs is arguably the highest across all industries given tenure (excl. outliers like some AI tech wonder kids); in Europe, I'd say, IBD VP cash comp is higher then most senior mgmt. comp at large public companies (not board level but B-1/B-2)
- Culture, hours and requirements seem much tougher in PE. I remember the times (5-6 years ago) when there were the musings that PE is an improvement in lifestyle, now it seems that PE lifestyle is at IB if not worse levels for juniors
- For seniors, PE hours seem materially worse. I know principals, MDs, in PE firms (not senior-senior MDs but fresher MDs) who do nothing else but work which makes sense, given lean headcounts but various complex tasks scattered across both, deal activity as well as portfolio work (vs. repeatable more process type of work in IBD)
- //edit: one counter-datapoint I found which I did not consider. It takes significantly longer then I expected to become VP in banking. I looket at various linkedin profiles and very few just ace through with e.g., 5Y of tenure (2 analyst + 3 associate) to VP at least in Europe. I saw various profiles of ppl. jumping around banks and becoming VP at around 6ish to 7 year tenure
>>> Conclusio: if you are not a tech-wonder kid, million dollar start-up founder, etc., and just your typical finance/biz/econ grad, IB seems to be the absolute honey-pot.
I am just wondering where does my logic breakdown? As a MBB consultant, the first years are arguably much more fun/sustainable than in banking. It seems to switch at my tenure though. From the perspective of bankers, why do all of those people leave in droves to PE funds, just to get shaf***ted for less cash comp?
I graduated a business school with ~50% going to IB ~50% to consulting and I would say max. ~5% of people stayed in IB. There are several cases where people jumped ship after putting in 1 Year at GS/JPM and went to a PE fund as analyst.
Reason why I'm asking is because I have some opps. now in PE on the table but also have 1-2 interesting opportunities to be hired as assoc. into an IBD franchise.
Something about banking sounds too good to be true to me. Of course I know it is still high pressure and demanding, but it seems actually quiet manageable and great comp compared to PE and consulting.
Hours aren't everything. Ownership creates stress which can hurt your health more than hours (debatably).
I've not ever heard of MBB seniors hours getting worse over time... That's curious.
This is very real. One of the few perks of being an analyst is that all you are responsible for is your actions, which are fully within your control. But at VP and above you are responsible for outcomes, which are not fully within your control.
Yes. It gets much worse. The best time in MBB is as senior associate (workstream responsibility + good toolkit = good lifestyle). It gets worse when promoted to Engagement manager (suddenly need to manage clients, partners, senior advisors, team members) = more pressure and stress. And gets absolute worse at associate partner / principal (active across various engagements + several client pitches/discussions for senior partners + needing to have great utilization/storyline to get elected as partner).
Also partners push insane hours tbh (incl. travel all the time).
I always found this model in IB much more rewarding where you basically go more into review mode. But as consulting is so diverse and the problems are so multi-faceted there is different s*** that gets hot all the time. So it is not like "well I've done 100 deals within this vertical and lets just do XYZ", you always need to come up with something new.
Mmmm no, more layoffs and CEO pay raises please
Yes, I think for a handful of years the VP+ years could seem like where you’re getting peak leverage in your career. The stars need to line up though for you to really be cooking with gas: did you build political capital in the group so your pushback gets respect from seniors? Did you assemble a bullpen that is strong and that will run through walls for you? Is that bullpen young enough that they will remain largely intact for a couple years? Did you accrue enough deferred comp that your annual vesting makes a solid run rate? Do you still have your soul enough that you have the presence of mind to enjoy it all while responsibility climbs?
Pound for pound in a good year the money is good. But (especially at BB’s) it’s a small pool of serious, bankable clients. VP+ is where you need to get lucky in terms of having an MD who sees you as his/her successor and begins passing the torch or where you can snipe a strong M&A -> IPO -> BSD candidate and manage that as a career relationship. I think part of the great headline pay compensates you for the likelihood that you may fizzle out prior to revenue generation.
Great comments. A big part of really juicing your VP years is setting the stage for it beforehand.
I emphasize the building the bullpen part. Cultivating rockstars who align well with you and the group is really important for better hours but also to free up time to do the right things to set up the move to D.
Possibly if you know that you dont want to make a push for MD then you can do a year or two as a VP where it isnt horrible (depending on what deals you are on). But you will get pushed out eventually
If you are gunning for MD then its still really tough to take it easy
VPs at some teams in GS/JP/MS in London work 9am-7pm. 200-300k TC. No longer in the weeds all the time doing grunt work.
Seems like heaven. But how long can coast at that level?
200k TC at VP level? seems very low
I have no clue hence the wide range. But I know its multi 6 figs and its crazy money for those hours
Average VP TC In GS/MS is 250-350. At JPM is 200-300. Speaking only for MS here, but VP's are routinely working until around 11pm.
They should seriously offer lifetime senior asso / vp / junior d positions to burnt out bankers just like law firm offering counsel to not so ambitious lawyers
Is associate also already chill in banking? A friend of mine is associate and he said he just pushes all the work down to analyst.
That would never happen in consulting where you basically own some complex BS workstream "end-to-end". Like there is literally no-one below you, only besides you (juniors) which are managed by the project manager but can't be used like analysts in banking.
You’re not supposed to do that as an associate - you’re still expected to be “in the weeds” in the PPT, XLS, etc.
Some associates still dump everything on analysts - most get sniffed out eventually but it usually takes longer than expected. The ones that get away with it typically have some DEI attributes.
It’s only great if you don’t want to go further and plan your escape route.
I know way too many VPs who chilled and got stuck as Directors with no book of business or client base.
GREAT exit opportunities are hard to come by the more senior your get if you’re not developing a network
Hours
It can vary wildly and depends on your group’s dealflow and your personal ambitions. On the surface, you’re right - from a pure time perspective (time sat at desk / in front of computer) it does look good. If you have a low dealflow group and/or just do the minimum (delegate to team / review things), it can be quite easy
But there are a few factors to consider:
Overall, all to say is that you will always be plugged in and on - in a way more than as a junior (where once your deliverables are done, you are off). Lower hours at a computer, yes, but just as many thinking about work. Honestly it’s just a part of becoming more senior, both in IBD but also other industries
That makes sense so if the team screws up something the VP gets thrown under the bus by the MD for not catching it? :D
Ideally your MD won’t be throwing you under the bus in front of the client - it’s a bad look overall since it messages poor team unity.
But as a VP, your day to day job is a project manager - both in terms of planning the workproduct details, logistics to get it done, and QCing. The MD is responsible for figuring out at a high level what to show the client and key messages to cover that they think will be impactful, and maybe some guidance on rough concepts for the pages (unless they have a very specific vision of an analysis), but generally not a lot beyond that. Thus as a VP you have full ownership over the details of the deliverable - the MDs only job is to make sure the right topics are put in front of the client to drive the dialogue forward.
As a result you need to make sure to set realistic timetables, handle any hiccups (and flag upwards ASAP to the MD if any major issues that you can’t solve), and ultimately are responsible for the quality of the work product. So yes, it will be your fault if any of that falls through.
On a live deal, for example, if the MD calls you right now, do you have a handle of all the 5-10 things at any given time in progress (buyer outreach, engagement letter, model, DD, fairness commitee, scheduling of client calls, etc) that you know exactly where they are, who’s court they’re in, etc. Will you remember to check in on things that need to get done today/next week, or even 3 weeks later (perhaps a buyer said they’ll come back with feedback in 2-3 weeks after they finish something else up)
Multiply that by 2-3 deals and you need to be on it for all of those, plus remembering for the rest of your company coverage, which clients you haven’t spoken to in months now (and remind the MD to outreach or do it yourself), or that a certain few clients said they’ll wanted to revisit a potential financing at the end of this year and that you need to check-in with them to make sure you don’t miss it
As a junior, you just need to do what you’re told / what’s on your plate now. Once done, it doesn’t really fall on you to take initiative on anything else (but the best juniors do also help with this / remind more senior bankers to do so). Yes, the juniors will be told to execute the majority of the work items I just listed, but as a VP you always need to have 100% awareness of everything that’s going on. Hence my comment about not being able to turn off
Being a VP is chill if you don’t care about staying in banking or building your network.
The VP role when done “right” is time consuming.
No you are not necessarily building pages or models, but you are constantly thinking about how to push processes and work products forward. You’re managing juniors, seniors and clients all at the same time.
You’re also trying to build out your own client coverage. Many of whom could be your eventual exit opportunity.
A good / great VP is expected to be proactive, not reactive, which can be a stark change from your junior days when you were told what to do and just needed to produce a good work product.
It really all depends on who your MD is. There is one in our firm that is a complete disaster. no guidance, constant chaos, and his VP is left second-guessing his whims
Hard to imagine how he ever became an MD… probably thanks to the right marriage and well-placed connections (his wife connections helped him assigns few mandates)
That’s why the VP ends up being the most stressed person in the room
A burnt out / not caring Director is the best job in IB. You can easily hang around for a while without much problems. You can push work to the VP and others. That’s the real dream
As a VP you’ll be very quickly found out if you’re not in the detail. I don’t really care your analyst fucked up the analysis, it’s your job not mine to catch that.
VP at a bank is also worse pay than equivalent YOE people in PE - but PE is much tougher. So not totally sure where you get those numbers from
Finance is generally overpaid, so if you don’t care about your career and coast then yes the numbers will look very appetising. Tech is the true place to be with many many super mediocre people getting paid good money for unclear reasons
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